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China’s consumer inflation up 1.9% in Dec

China’s consumer price index (CPI), a main gauge of inflation, rose 1.9 percent year-on-year in December last year, the National Bureau of Statistics (NBS) announced Thursday.
It is the second straight monthly growth after the index ended nine months of decline in November.
The full year inflation was down 0.7 percent, NBS said.

China faces arduous task of macro control

China is facing more “arduous” task of maintaining sound and relatively fast economic growth in 2010 as macro-control would be more complicated amid rising inflation fears, the central bank said on Friday.
“China faces daunting task of keeping stable prices, improving credit structure, preventing systematic financial risks and maintaining international balance of payment,” the People’s Bank of China (PBOC) said in a quarterly economic review posted on its Web site.
The economic recovery will continue to consolidate in 2010 as private investment is expected to strengthen and corporate profit is to improve, it said.
PBOC noted it will keep the relatively easy monetary policy, and also reaffirmed the policy will be consistent and stable, while also more flexible and targeted.
China’s economic growth quickened to 10.7 percent in the fourth quarter boosted by strong government-led investment and record bank credit.
As GDP resumed double-digit growth, the consumer price index added 1.9 percent in December, the second monthly rise after ending nine months of decline in November.
Prices face upward pressure in 2010 on rising commodity prices, ample credit growth, stronger domestic demand and more liberalized domestic resource prices, it said.
However, it also noted abundant supply of grain and other consumer products, and the overcapacity in some industries will curb price hikes.
The central bank restated it will maintain ample credit supply while also improve credit structure and keep even pace of credit growth, after the 9.6 trillion yuan of new loans issued in 2009 intensified risks of bad loans and asset bubbles.

Lending curbs may help economy: Mobius

China’s lending slowdown may benefit the domestic economy by reducing risk and investors should still buy shares of the nation’s banks, investor Mark Mobius said.
“I don’t see a slowdown in lending as a bad thing,” Mobius, who oversees about $34 billion in emerging markets funds as chairman of Templeton Asset Management Ltd, said yesterday. “It moderates risk to some degree because people don’t go overboard.”
Chinese banks have begun restricting new loans, responding to a push by regulators to contain credit after a surge in lending in the first half of this month, according to people familiar with the situation. That’s stoking concern a government clampdown on lending will slow growth in the world’s third largest economy.
Recent gains by Chinese stocks had been overdone, while local banks have yet to tap fully potential demand for individual loans, Mobius said. The Shanghai Composite Index has dropped as much as 23 percent from a 14-month high set in August, after having doubled from its November 2008 low. The measure is currently 13 percent below last year’s peak.
“The market was due for a correction,” he said. “I don’t see the start of a huge bear market any time soon. As the Chinese get more into spending rather than saving, the banks will do very well. The consumer market really has just scratched the surface.”
Global equities tumbled last week after higher-than-expected economic growth in China fueled concern that borrowing costs will rise to prevent the economy from overheating.
GDP expanded 10.7 percent while consumer prices rose a higher-than-estimated 1.9 percent in December from a year earlier, according to official data.
Every major stock index tracked globally by Bloomberg has fallen this year, amid proposed crackdowns by the US on the banking industry and unwinding of government stimulus measures worldwide. The MSCI Emerging Markets Index, which jumped 75 percent in 2009, has dropped 5.3 percent this year.
Biggest risks
The three biggest risks to China are the country’s reliance on demand for its exports, the supply of money, and potential losses by companies, in China and overseas, from derivatives, Mobius said.
Mobius said on Jan 25 in Bangkok that he still doesn’t believe there’s a property bubble in China. He had said on Jan 7 he’s buying shares of Chinese developers because consumer demand will increase and government efforts won’t hurt economic growth.
Property prices in 70 cities across China climbed 7.8 percent in December, the fastest pace in 18 months, a government report showed this month. China’s property sales jumped 75.5 percent to 4.4 trillion yuan last year, led by Zhejiang province and Shanghai.
‘Too much demand’
China’s property-market data may be masking the degree that speculation is driving prices in some of the larger cities, a World Bank economist said on Jan 25. Only some areas in the Chinese economy are overheating, such as the Shanghai property market, Mobius said. “There’s too much demand, not enough supply,” he said. “If you travel around the country, this is not the average situation.”
Mobius also said the price of commodities, including some precious metals, will climb. Metals prices fell yesterday on concern that China’s measures to curb economic growth may hurt demand. “Commodities are going to continue their upward trend,” he said. “I’m a big fan of palladium. It may even outpace platinum.”

China’s CCI rises in Q4 of 2009

China’s consumer confidence index (CCI) rose to 103.9 in the fourth quarter last year, up 3.1 percentage points from the previous quarter, said a report released on Jan 26 by the China Economic Monitoring &Analysis Center under the National Bureau of Statistics.
The rise was largely due to consumers’ optimistic judgement on the country’s economic outlook and strong expectation for employment and personal income, said the report.
It also showed 79 percent of Chinese consumers were optimistic toward the country’s macroeconomic situation, an increase of 36 percentage points from the third quarter.
The report revealed that personal income and health remained top concerns, with 43 percent of respondents saying they paid close attention to the issue of personal income.
Some 68 percent of respondents expected price rises this year.
The CCI measures consumers’ opinions on employment, the economy, regular income, the stock market and quality of life.
China’s economy expanded 8.7 percent in 2009 from a year earlier, exceeding the government’s annual growth target of 8 percent.

IMF: China’s economy up 10 percent in 2010

The International Monetary Fund (IMF) said Tuesday the global economy is recovering faster than previously anticipated and will grow 3.9 percent this year and 4.3 percent in 2011.
China, the largest emerging economy, will expand 10.0 percent this year and 9.7 percent next year, much better than previous forecasts.
And India is expected to expand 7.7 percent this year and 7.8 percent next.
The IMF said it had revised upwards its earlier forecast for global growth by 0.75 percentage point from the October 2009 forecast.
But the recovery is proceeding at different speeds around the world, with emerging markets, led by Asia relatively vigorous, but advanced economies remaining sluggish and still dependent on government stimulus measures, the IMF said in an update to its World Economic Outlook.

According to the update, output in the advanced economies is now expected to expand by 2 percent in 2010, following a sharp decline in output in 2009.
In 2011, growth is projected to edge up further to 2.5 percent.
Among advanced economy forecasts, growth in the United States, the world’s largest economy, will reach 2.7 percent this year, a sharp 1.2 percent increase from the prior forecast.
The euro are is expected to grow 1 percent this year and 1.6 percent in 2011, while Japan is seen expanding 1.7 percent this year and 2.2 next.
“In spite of the revision, the recovery in advanced economies is still expected to be weak by historical standards, with real output remaining below its pre-crisis level until late 2011,” said the report.
Moreover, high unemployment rates and public debt, as well as not-fully-healed financial systems, and in some countries, weak household balance sheets are presenting further challenges to the recovery in these economies.  
Growth in emerging and developing economies is expected to accelerate to about 6 percent in 2010, following a modest 2 percent in 2009, said the IMF in the update.
“In 2011, output is projected to accelerate further,” it said, noting that stronger economic frameworks and swift policy responses have helped many emerging economies to cushion the impact of the unprecedented external shock and quickly re-attract capital flows.
But the IMF also stressed that within both groups, growth performance is expected to vary considerably across countries and regions, reflecting different initial conditions, external shocks, and policy responses.
“For instance, key emerging economies in Asia are leading the global recovery,” said the IMF in the update. “A few advanced European economies and a number of economies in central and eastern Europe and the Commonwealth of Independent States are lagging behind.”
Meanwhile, the rebound of commodity prices is helping support growth in commodity producers in all regions, and many developing countries in sub-Saharan Africa that experienced only a mild slowdown in 2009 are well placed to recover in 2010.
“For the moment, the recovery is very much based on policy decisions and policy actions,” said IMF Chief Economist Olivier Blanchard in an IMF video interview. “The question is when does private demand come and take over. Right now it’s ok, but a year down the line, it will be a big question.”
IMF Managing Director Dominique Strauss-Kahn has warned that countries risk a return to recession if anti-crisis measures are withdrawn too soon.
Moreover, the IMF also warned financial conditions have improved further but remain challenging.
“Financial markets have recovered faster than expected, helped by strengthening activity.  Nevertheless, financial conditions are likely to remain more difficult than before the crisis,” it said.
Crucially, there remains a pressing need to continue repairing the financial sector in advanced and hardest-hit emerging economies.
In these cases, policies are still needed to tackle bank’s impaired assets and restructuring, said the IMF, also urging policymakers to move boldly to reform the financial sector to reduce the risks of future instability.

LG Electronics targets to double share in North American air conditioner market

South Korea’s LG Electronics, the largest air conditioner manufacturer in the world, said Tuesday it is targeting a twofold jump in its commercial air conditioner market share in North America.
In a related move, LG participated in the 2010 AHR Expo Monday in Orlando, Florida to unveil 25 new commercial air conditioner models and Energy Star-labeled residential models, the company said.
LG also said it has been expanding its infrastructure for commercial air conditioners (CAC) in the North American market, as it has opened its second LG CAC Training Academy last December with plans to build two more by the end of the year.
The AHR Expo is the world’s largest heating, ventilation, air conditioning, and refrigerating exposition, where more than 1,800 exhibiting companies from over 120 companies showcase their new product lines.
The Energy-Star label, awarded by the U.S. Department of Energy and the Environmental Protection Agency, is only given to products that prove it is significantly more energy-efficient than regular products.

Shanghai posts 8.2% growth in GDP

Shanghai’s economy secured a year-on-year growth of 8.2 percent in 2009, with faster expansion in the service industry countering a slower pace in manufacturing, the Shanghai Statistics Bureau said Friday.
The gross domestic product in Shanghai last year jumped to 1.49 trillion yuan (218 billion U.S. dollars), with annualized rates in the four quarters settling at 3.1 percent, 7.9 percent, 9.8 percent and 11.2 percent, respectively.
“Shanghai’s economic performance has presented a clear trend of recovery,” the bureau’s chief economist Cai Xuchu said Friday. “Weak external demand may remain a drag on the city’s growth this year, but the overall economic conditions have been improved significantly.”
The yearly 8.2-percent growth rate trailed behind an increase of 9.7 percent in 2008 and 13.3 percent in 2007, making last year the second in a row to show a slowdown in growth after Shanghai had run at a double-digit pace for 16 years.
“The financial crisis is an apparent factor to deter the growth. But the slowdown is also a natural response to the city’s efforts of revamping its economic structure,” Cai said.
Benefiting from years of reform, Shanghai’s service industry accounted for 59.4 percent of the city’s total output last year, up 3.4 percentage points from 2008.
Production in the service sector gained 12.6 percent on an annual basis last year. The manufacturing industry edged up 3.1 percent. The agricultural sector contracted 1.1 percent.
Companies in financial, real estate and retail markets were three star performers in Shanghai’s service sector.
Addressing a question on the growing expectation of inflation, Cai said consumer prices in Shanghai will register a mild, controllable growth this year.
He said prices will rise because of higher costs in public services like water, transport and health care. A credit market with ample liquidity may accelerate the pace, he said.
“But it will be mild and within control,” Cai said.
Shanghai’s Consumer Price Index fell 0.4 percent in 2009 from a year earlier because of constant decreases after February. The losing streak ended in November. The CPI gained 1.2 percent last month mainly from price rises in food.
Shanghai’s fixed-asset investment last year expanded 9.2 percent from a year earlier, to 527.3 billion yuan. That included 146.4 million yuan spent on property development.
Retail sales in the city last year gained 14 percent to 517.3 billion yuan. Exports declined 16.2 percent to 141.9 billion dollars.
Disposable income of Shanghai dwellers last year jumped 8.1 percent to 28,838 yuan. The city’s unemployment rate stood at 4.3 percent, virtually unchanged from a year earlier.
Shanghai has set this year’s GDP growth target at over eight percent.

New pollution reduction targets listed

 

 
China published new targets for the reduction of major pollutants yesterday as it ran into the final year to realize its green goals.
The country will meet its binding targets to reduce emissions of sulfur dioxide (SO2), the major cause of air pollution, and chemical oxygen demand (COD) – the main indicator of water pollution – by 10 percent from 2005 levels in 2010, the Ministry of Environmental Protection (MEP) said yesterday.
The authorities also aim to reduce another 400,000 tons of SO2 and 200,000 tons of COD beyond the targets, which were set in its 11th Five-Year Plan (2006-10).
In order to achieve that, the ministry will strive to increase urban wastewater treatment capacity by 10 million cu m, and install sulfur removers for power generators with a total capacity of 50 million kw this year.
Preliminary calculations show that China had already realized its SO2 reduction goal by the end of 2009, one year ahead of the schedule, the ministry said at the annual national conference on environmental protection held in Beijing yesterday.
By the end of 2008, total emissions of sulfur dioxide and COD had dropped by 8.95 percent and 6.61 percent, respectively, from 2005 levels.
The ministry also said it will intensify the fight against heavy-metal pollution and an overall plan for heavy-metal pollution prevention will be released by the end of June.
China has been faced with an increasing number of major heavy-metal pollution incidents. Several lead poisoning cases involving thousands of children across the country sparked protests last year.
As the country is poised to meet its 11th Five-Year Plan targets, a number of policymakers and academics have also started planning for the next five-year period.
The ministry said two new pollution indicators – nitrogen oxide (NOx), which is discharged from vehicles and power plants and causes acid rain; and ammonia nitrogen, another major measure of water quality – were introduced into the emission control list during the 12th five-year plan (2011-15).
The authorities will also need to find new mechanisms to reduce pollutants, as current projects-based measures to curb pollution have reached their limits, reducing the future capacity for emission reduction, said Zhao Hualin, director of the total emission control department from the ministry.
For instance, China required all its coal-fired power plants to install sulfur scrubbers to reduce SO2 emissions. By the end of 2008, more than 60 percent of China’s thermal power generating units had been equipped with such facilities, compared with 12 percent in 2005.
“The remaining capacity is lessening, forcing us to find new battlegrounds for emission reduction. For instance, the sintering process at steel mills is also a major SO2 emitter,” Zhao said.

Xi urges change in development mode

Vice-President Xi Jinping (R) talks with parents of a newly born baby at Shiying residential area in Xiangfan city during his visit in central China’s Hubei province on Jan 22, 2010. [Xinhua]
Vice-President Xi Jinping urged more efforts to promote transformation of economic development mode to ensure sound and fast economic and social development during his four-day trip to central China’s Hubei province which concluded on Sunday.
He said that beefing up technology innovation was the fundamental means to transform economic development mode, and also an important way to realize scientific development, Xi said during his visits to a local auto plant, an iron and steel factory, a ship making mill and a university lab.
He said the government should guide enterprises to apply scientific research achievement in production and industrial upgrading.
Xi also called for more efforts to further study and put into practice the Scientific Outlook on Development, which emphasized the well-being of people and comprehensive, coordinated and sustainable development.
During his tour to local resident communities, Xi asked local authorities to care about people’s lives and help solve their problems.

China’s total fixed-asset investments up 30.1% in 2009

China’s total fixed-asset investments rose 30.1 percent year-on-year to 22.48 trillion yuan ($3.29 trillion) in 2009, the National Bureau of Statistics (NBS) said on Thursday.
The rate of increase was 4.6 percentage points higher than the same period of 2008.
Urban fixed-asset investment rose 30.5 percent from a year earlier to 19.41 trillion yuan. The growth rate was 4.4 percentage points higher than that for 2008.
Fixed-asset investment in rural areas totaled 3.07 trillion yuan, up 27.5 percent from a year ago, and 6 percentage points higher than the growth rate in 2008.
Among urban fixed-asset investment, the growth rate in the primary sector (farming, fishing and forestry, among others) climbed 49.9 percent from a year earlier.
The industrial sector saw investment up 26.8 percent and the tertiary sector, or the service sector, which covers commerce, finance and services, posted a 33.0 percent growth.
China unveiled a 4-trillion-yuan stimulus package in November of 2008 to accelerate the economic growth which slowed to 6.1 percent in the first quarter of last year due to tumble in exports. The 4 trillion yuan stimulus plan included 1.8 trillion yuan which was scheduled to be used to build more railroads, highways, airports and other infrastructures.
The record bank lending and government spending had boosted the growth of the fixed-asset investment, Jing Ulrich, managing director and chairman of China Equities and Commodities of J.P. Morgan, said in a report.
She expected the growth would slow in 2010 as the government put restrictions on new projects investment. The investment would focus on projects that have began, she added.
Minister of Industry and Information Technology Li Yizhong said in December that the government would intensify management over projects approval and reject expansion projects of docks, slipways from existing shipbuilding enterprises, and new capacity building and expansion projects in aluminum electrolysis and steel sectors in three years.